Mortgage giants Fannie Mae and Freddie Mac are upping the ante when it comes to affordable housing.
The Federal Housing Finance Agency, which regulates Fannie and Freddie, said Monday that the two enterprises will contribute nearly $1.14 billion to the Housing Trust Fund and the Capital Magnet Fund. It’s the largest amount that Fannie and Freddie have ever provided.
“Today’s announcement of record funding for additional housing production will help increase access to affordable, sustainable housing options,” said Sandra Thompson, the FHFA’s acting director, in the announcement. All told, Fannie and Freddie are contributing nearly $45 million more this year to the two funds than they did in 2021.
The Housing Trust Fund is overseen by the Department of Housing and Urban Development and provides grants to states and other state-designated entities to promote the production and preservation of affordable housing. The Capital Magnet Fund is overseen by the Treasury Department and awards its money in grants to community-develop financial institutions and nonprofit developers.
Fannie and Freddie’s larger contributions come at a time when an overall shortage of housing nationwide is being blamed for rising home prices and rents. A recent study co-authored by Harvard economist Lawrence Summers projected that housing inflation could increase to 7% this year as a result. Housing inflation only amounted to around 4% for the 12 months ending in January.